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Can negotiating bank place the documents by URC although L/C is UCP600

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Fri, 09/16/2011 - 21:34
chanchal
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Joined: 03/17/2010
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Somedays before i received a document from the nego bank that the bank forwarding mentioned URC

1. L/C is UCP600

2. No late Shipment

Can this document followed by URC instead of UCP?

 

Chanchal,SJIBL

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Sat, 09/17/2011 - 02:31
#1
pan
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Joined: 09/13/2007
URC rather than UCP

Hi Friend,

frankly many banks use the same form to forward documents under URC or UCP. I saw a little note on forms, specially designed for collection, as "or under UCP where applicable " or the like. But, in case of negotiation, a nominated bank must indicate that "the a.m.amount has been duly noted on the reverse of L/C".

So the issuing bank can understand if the documents have been negotiated or simply sent for collection. However the issuing bank(or confirming bank) will act as per UCP 600 art 16,except that the l/c is expired.

Other comments appreciated

Ciao

 

 

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Sat, 09/17/2011 - 03:35
#2
Abrar
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Joined: 03/12/2009
URC

Hmmm... If the remitting bank has stated that the documents are to be handled as per URC, my view is that they have (perhaps unwittingly) forfeited any rights available to the beneficiary under the UCP. That is to say, the issuing bank is relieved of any obligation to examine under the LC and UCP, and would only pay subject to applicant's/drawee's agreement to take up the documents.

The better practice for the remitting bank would have been to make clear that the documents are being sent "on approval" but under full protection of UCP. In this case, the issuing bank would be obliged to adhere to the provisions of UCP, especially Art16.

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